Author: Matthew G. Saroff

This is Kind of Horrifying

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In a story about how a candidate for Erie County Sheriff (Buffalo, NY), completely screwed up a drug raid and the warrant he swore out to allow it, we have the following testimony from another member of his team:

[Detective Joseph M.] Cook had shot other dogs in drug raids. He did not dispute during the deposition that he had shot 26 dogs over roughly a three-year period.

So, he shot a dog about once every six weeks.

The owner of the job got a $110,000 settlement.  Nothing wrong here, I guess. 

Support your local police.

Speaking of Leverage

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Indeed, WTF


Increased leverage goeth before a fall

It appears that the use of margin trading, one of the things that triggered the stock market crash of 1929, is spiking, which is a pretty good indicator to me that we are headed to another market panic:

In the current craze that encompasses everything from sneakers and NFTs to stocks, where valuations don’t matter because of widespread certainty that valuations will be even greater in a few days, and where folks are chasing lottery-type returns, supported by the Fed’s interest rate repression and $3 trillion in asset purchases, and by the government’s trillions of dollars of handouts and bailouts – well, in this perfect world, there is a fly in the ointment: Vast amounts of leverage, including stock market leverage.

Margin debt – the amount that individuals and institutions borrow against their stock holdings as tracked by FINRA at its member brokerage firms – is just one indication of stock market leverage. But FINRA reports it monthly. Other types of stock market leverage are not reported at all, or are disclosed only piecemeal in SEC filings by brokers and banks that lend to their clients against their portfolios, such as Securities-Based Loans (SBLs). No one knows how much total stock market leverage there is. But margin debt shows the trend.

In February, margin debt jumped by another $15 billion to $813 billion, according to FINRA. Over the past four months, margin debt has soared by $154 billion, a historic surge to historic highs. Compared to February last year, margin debt has skyrocketed by $269 billion, or by nearly 50%, for another WTF sign that the zoo has gone nuts:

………

And it’s risky leverage for the borrower. It seems like risk-free leverage when stocks go up, but when your stocks do the unheard-of and tank below a certain level, your broker will ask you to put more cash into your account or sell stocks into the tanking market, whereby you then join the legions of forced sellers.

In the past, a big surge in margin balances tended to precede history-making stock market declines:

………

Leverage is the great accelerator of stock prices, on the way up, and on the way down. Purchasing stocks with borrowed money creates buying pressure, and prices rise, and rising prices increase the margin balances a portfolio can support, and this encourages more stock-buying on margin.

On the other hand, selling stocks to deal with margin calls adds more selling pressure to an already declining market. The more prices fall, the more selling pressure there is from frazzled forced sellers trying to deal with margin requirements.

When market correct, this is going to be very ugly.

H/t Naked Capitalism.

Probably a Good Idea, Not Sure If It Is the Right Time

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The Federal Reserve is looking to reverse its pandemic driven loosening of capital requirements for banks. 

I am generally in favor of higher capital requirements for banks, because when the requirements are lowered, fraud, incompetence, and collapse invariably follow.

On the other hand, I’m not sure if now is the best time for this:

The Federal Reserve has announced that it will let looser capital rules for banks introduced at the start of the pandemic expire at the end of March.

The US central bank’s decision could disappoint banks, which had been pushing for an extension of the capital relief.

Capital rules were eased last year in a temporary change to the supplementary leverage ratio (SLR), and have been the focus of an intense political battle in recent weeks.

While Democrats in Congress had argued that the relief from capital rules should be terminated at the end of this month, many Republicans sided with the banks to argue for an extension.

The Fed said on Friday that the change to the SLR would expire as scheduled on March 31. However, the central bank said it would explore a more permanent overhaul to the rules.

………

The SLR requires large banks to have capital equal to at least 3 per cent of their assets, or 5 per cent for the largest systemically important institutions. Under the April 2020 rule change, lenders were allowed to temporarily exclude holdings of US Treasuries and cash kept in reserve at the central bank from their assets when calculating the ratio.

………

Bank executives have warned that the reimposition of these capital requirements could hamper their ability to extend credit to companies and consumers, and in some cases force them to turn away deposits.

If you cannot justify a loan with a return to (already dangerously lax) existing capital requirements, you should not have made the loan in the first place.

If you are making those loans, then when (not if) you need a bailout, the taxpayers will be on the hook

This Reminds Me of Bush and Hurricane Katrina

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By August of 2005, Karl Rove had managed to manipulate the public discourse in such a way as to make meaningful criticisms of George W. Bush almost unthinkable.

Then came Katrina, and much like New Orleans and its levees, the ensuing backlash washed away Rove’s carefully constructed barriers intended to protect bush, and everything started coming out.

The same is going on with Governor of New York Andrew Cuomo right now, and here is an update:

  • We have another claim of sexual harassment, this one from a current aide, “He called her and her co-worker “mingle mamas.” He inquired about her lack of a wedding ring, she said, and the status of her divorce. She recalled him telling her she was beautiful — in Italian — and, as she sat alone with him in his office awaiting dictation, he gazed down her shirt and commented on a necklace hanging there.“
  • Also, we have reports that the  FBI is investigating ties between campaign donations from nursing homes and his inserting immunity provisions in legislation, “FBI investigators probing the Cuomo administration’s handling of nursing homes during the pandemic last spring are seeking information about a state budget provision that gave operators legal immunity, THE CITY has learned. ……… FBI officials started to make house calls this month, showing up at people’s residences and leaving business cards, according to the three sources.“

FWIW, I don’t think that “Rat Faced Andy” is going to resign except perhaps as part of a plea deal, because he wants to make sure that he has this chip in his pocket until it is certain that he won’t be going to jail.

I so hope that he goes to jail.

Don’t Give to the Audubon Society

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As I have noted before, “You Don’t Do Good by Doing Bad,” and this goes double for charities that go full scorched earth to suppression union drives, as is the case, unfortunately, for The Audubon Society, which has chosen to go on a jihad against its employees unionization efforts:

As President Biden touts union jobs as central to America’s clean energy future, a fight over unionizing has broken out at one of the country’s leading conservation groups.

Employees at the National Audubon Society are organizing after allegations of widespread workplace problems, including two rounds of layoffs, a mishandled diversity training, and the resignations of two top equity and inclusion officials.

They say they are meeting sharp resistance from the group’s management, which has hired one of the country’s most well-known union-busting firms.

Audubon strongly disagrees with that characterization, saying that it does not oppose the effort and that the firm, Littler Mendelson PC, was hired to provide advice to managers to stay out of the organizers’ way — not to break them up.

Littler Mendelson PC is notorious for busting unions, and half of their own web pages tout their “Union Avoidance” strategies.

But tensions between the organizers, who have rallied under an “Audubon for All” banner, and management nevertheless seem to have quickly reached a boil. They claim Audubon management is deploying some of Littler’s tactics, and they filed a complaint this week with the National Labor Relations Board alleging Audubon’s management is improperly meddling in their organizing effort.

………

In an emailed statement, Audubon said it is “devoted to providing a workplace in which all our employees feel respected, valued, and empowered.”

………

Audubon insisted that Littler is not advising the organization on how to combat the unionizing effort. But Littler’s website states that’s one of its specialties, and a handbook from the firm obtained by E&E News lays out multiple strategies for fighting unionization efforts.

“Our deep experience in representing management serves as a strong counterpoint to the world’s most powerful labor organizations,” its website states. “We guide companies in developing and initiating strategies that lawfully avoid unions or effectively respond to unconventional corporate campaigns.”

Union officials, including from CWA, said Audubon is setting itself apart at the wrong time.

Gee, ya think?

………

President and CEO David Yarnold’s handling of the anonymous survey, including allegedly asking for the names of participants, led to the October resignation of one senior diversity specialist, Devon Trotter. Another official, Deeohn Ferris, left the previous March and said she was forced out.

Those developments coincided with two rounds of layoffs, in which 108 employees were let go. One round took place last June, and another, larger round was announced on Earth Day last April.

It appears that the management wants to run the company like a business, burn it down for the insurance money.

Strange Times Require Strange Tools

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Pleased to present for your consideration, the Zoom Escaper, which provides technical subterfuge to allow one to get out of a remote meeting:

Had enough Zoom meetings? Can’t bear another soul-numbing day of sitting on video calls, the only distraction your rapidly aging face, pinned in one corner of the screen like a dying bug? Well, if so, then boy do we have the app for you. Meet Zoom Escaper: a free web widget that lets you add an array of fake audio effects to your next Zoom Call, gifting you with numerous reasons to end the meeting and escape, while you still can.

You can choose from barking dogs, construction noises, crying babies, or even subtler effects like choppy audio and unwanted echoes. Created by artist Sam Lavigne, Zoom Escaper is fantastically simple to use. All you need do is download a free bit of audio software called VB-Audio that routes your audio through the website, then change your audio input in Zoom from your microphone to VB-Audio, and play with the effects.

You can watch a video tutorial on how to set up Zoom Escaper and listen to a sample of the various sound effects here:


If you’re running Zoom Escaper, you can’t actually hear the sound effects yourself. But I was able to test the site’s functionality with the help of my colleague, Verge news editor Chaim Gartenberg. Here was his opinion of the various effects Zoom Escaper had to offer:

  • Urination: “That sounds very fake. Also, I’m not entirely sure what the plan is to sell this as a reason to leave a call?”
  • Construction: “This sounds like you literally stood in the middle of a construction site. I think the sounds need to be a bit more muffled to sell it, but it’s very good.”
  • Man Weeping: “Those are the sobs of a broken man. But who’s crying — is it your roommate, your partner?”
  • Bad Connection: “This one works really well. Your audio is coming through broken up and disrupted. Get off the call.”
  • Echo: “Extremely annoying and very convincing. This sounds like a busted Zoom connection. If someone I was speaking to had this, I’d tell them to get it fixed. It wouldn’t be feasible to have a meeting with that.”
  • Wind: “If you were trying to skive off work, I’m not sure how you’d convincingly sell gale force winds in your own office.”
  • Dog: “That sounds very real. It sounds like a dog barking outside, but maybe not the sort of thing you’d need to take care of?”
  • Upset Baby: “That baby sounds decently upset! This is definitely something you should go and check on! Go and take care of your baby!”

This is so very tempting.

Also, it’s art, according to its creator, artist Sam Lavigne.

And Unemployment Goes Up

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Initial jobless claims rose by 45,000 to 770,000 last week.

Not good news:

Worker filings for jobless benefits are hovering near the pandemic’s lowest levels, adding to evidence of recent economic improvement.

Jobless claims rose last week to 770,000—still elevated above the pre-pandemic peak of 695,000—but have declined since January. The four-week moving average, which smooths out weekly volatility, fell last week to about 746,000, near November’s pandemic low.

An increase in Texas accounted for about half of last week’s overall rise in jobless claims, which could reflect delayed effects from last month’s winter storm, some economists said.

More broadly, declining jobless claims are one sign of economic improvement. U.S. employers added 379,000 jobs in February, and the unemployment rate ticked down to 6.2%. The U.S. manufacturing industry has exhibited steady signs of expansion. JPMorgan Chase & Co.’s tracker of credit- and debit-card transactions showed consumer spending climbed in early March.

Economists expect widespread distribution of vaccines and a fresh round of government stimulus to fuel growth in the first half of this year.

They are predicting that economic growth this year will be about 6.5% in the US, largely because of government stimulus.

Me, I’ll take the under, but the fact that people are lauding fiscal stimulus, as opposed to waiting for monetary stimulus to eventually do its thing, is a nice change in the conventional wisdom.

 

Looks Like Another Take on the B-70 Valkyrie

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Not particularly informative, but the patent application has a bit more information


The B-70 with the wingtips lowered to contain the sonic boom


106 is the Engine, 108 is the nacelle, and 114 is the underside of the wing


Some more detail.

I just came across this brief bit about New Century Transportation & Aeronautics Research’s (NCTAR) concept for a low sonic boom SST, and it seems rather similar to the compression lift concepts developed for the B-70 supersonic bomber in the late 1950s.

It had wingtips that folded down (see picture, those wing tips are each as big as a Mirage III wing) that contained the shock waves generated off of the inlet and fuselage which increased lift.

This contained the pressure under the aircraft and increased lift and so improved its lift to drag ratio. (It also moved the center of lift forward, reducing trim drag at supersonic speeds, but that’s for another post)

It appears taht NCTAR is looking to do the same thing, only with an additional goal of using shock waves and bypass air from the engine to reflect the sonic boom (shock wave) back up to the wing, and hence attenuate the, “Boom.”

Basically shock-waves off the engines, which are located in front of the wing keep the boom, and its pressure  contained under the wing, increasing efficiency and reducing boom.

A part of this is that the bypass air is not, as is normally the case, ejected radially, but rather from the bottom of the nacelle, further reinforcing the “wall” that contains the shockwave.

It’s a nifty concept, though I wander what the trade-offs might be:

With the resurgent interest in supersonic air travel, aircraft designers are looking at different ways to work around the problem of sonic booms. Flying supersonic only over water, or at a low enough Mach number to prevent shockwaves reaching the ground or shaping the airframe to minimize boom strength are all approaches being taken with aircraft now in development.

U.S. startup New Century Transportation & Aeronautics Research (NCTAR) has patented (U.S. patent 10,618,638) a different approach: use the engines and their exhaust plumes to reflect and attenuate the shockwaves from the wing and so reduce the sonic boom reaching the ground.

In NCTAR’s concept, the engines are located ahead of a wing that is curved so that, in cruise, the downward-propagating compression waves from the leading edges are focused onto the exhaust plumes. The shockwaves reflect off the shear layer between the freestream airflow and supersonic exhaust plume and back up onto the underside of the wing. This increases pressure under the arched wing and generates additional compression lift to improve supersonic lift-to-drag ratio.

Like I said, kind of nifty, in a B-70 bomber kind of way.

That being said, I really don’t see this for commercial airliners, because even with improvements, the aircraft will be less fuel efficient than their subsonic counterparts, but given the current trajectory of our society, I could see something akin to a supersonic version of a Gulfstream private jet come from this.

This is Completely Insane

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Boris Johnson and his merry band of blood-thirsty prats have decided that nuclear weapons are an appropriate response to agents of foreign governments hacking systems in the UK.*

This is completely bat-sh%$ insane.

Britain is prepared to launch nuclear weapons if the country was faced with an exceptionally destructive attack using cyber or other “emerging technologies”, according to the integrated defence review.

The stark statement marks a change from existing UK policy, which had been that Trident missiles could only be launched against another nuclear power, or potentially in response to extreme chemical or biological threats.

The new policy says Britain would “reserve the right” to use nuclear weapons in the face of “weapons of mass destruction”, which includes “emerging technologies that could have a comparable impact” to chemical or biological weapons.

It sets the UK in a different direction to the US, where the newly elected president, Joe Biden, had floated the idea during his election campaign of making the “sole purpose” of nuclear weapons to deter or if necessary to retaliate against a nuclear attack.

No further detail was spelled out in the document, published on Tuesday, but analysts said the shift in language was significant. Tom Plant, a director at the Royal United Services Institute thinktank, said: “This is clearly an indication that the UK government perceives the potential for some combination of novel technologies, in years to come, to rival existing WMD.”

Just imagine what happens if someone starts downloading pr0n using Boris’ Netflix account.

Shall we play a game?

Love to.  How about Global Thermonuclear war?†

And then there is this.

Discussion about Britain’s new nuclear policy unveiled by Boris Johnson, reversing 30 years of modest disarmament since the end of the cold war, dominated the publication of a 100-page integrated review of defence and foreign policy.

It confirmed leaks from Monday night that the UK would allow the cap on its nuclear weapon stockpile to rise to 260 from a target of 180 “by the mid-2020s” – and that the UK would abandon a second pledge to hold a lower number of operational warheads, previously set at 120.

This is a violation of the Nuclear Non Proliferation Treaty (NNTP) which the UK is a party to.

Defence sources said the decision to lift the warhead cap by over 40% was motivated by a desire to be more assertive about nuclear weapons. “If we have them, let’s not apologise for it, let’s own it,” an insider added.

So this is just all dick swinging.  Lovely.

So now, Boris is the world’s problem.

*As Anna Russell would say, “I’m not making this up, you know.”
†Yes, I know. I am referring to two completely different movies. Get over it.

This Will Not End Well

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So, the new hot thing is a payments processor called Stripe, and it is planning for an IPO and has just announced a $95 billion valuation with its series H funding round.

I’m generally dubious of “Unicorns”, and when I did a quick Google on Stripe, it appeared to be a fairly anodyne supplier payments processing, with the only “Innovation” I could see being its incorporation in Ireland, which will allow it to avoid most taxes.  (There appears to be no “Secret Sauce.”)

It’s a dull, if profitable, business with relatively low barriers to entry, but suddenly everyone is talking about making bank when it goes IPO.

I’m not saying that it’s a fraudulent operation, its business model appears to be solid, if rather dull.  What I AM saying is that its funding seems to be less about the business than it is about creating a hubbub which which will allow those institutional funders to fill their pockets, walk away, and the retail investor takes the losses when gravity returns:

The payments company Stripe is worth $95 billion after a new round of funding, making it the most valuable start-up in the United States.

The San Francisco and Dublin-based company said on Sunday that it had raised $600 million in new funding from investors including Sequoia Capital, Fidelity Management and Ireland’s National Treasury Management Agency. The investment nearly triples Stripe’s last valuation of $35 billion.

The funding comes amid a surge in the adoption of digital tools and services in the pandemic as more people live, work and make purchases online. That has fueled a wave of investment into, and eye-popping valuations at, tech start-ups, as well as a frenzy of highly valued initial public offerings. Investors have valued Airbnb, the home rental start-up that recently went public, at $123 billion. Roblox, a kids gaming start-up, saw its valuation soar to $45 billion when it went public last week.

Founded in 2010, Stripe builds software that enables businesses to process payments online. As more people have turned to online shopping in the pandemic, Stripe’s offerings have been in demand. It is the largest among a class of fast-growing, highly valued financial technology companies.

Then again, I am always profoundly skeptical of the, “Next Big Thing.”

This Should Get Interesting

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Sheldon Whitehouse (D-RI) has specifically asked Merrick Garland to investigate allegations that the FBI refused to conduct a full investigation of Brett Kavanaugh following his 2018 nomination to the Supreme Court. 

Given that something in excess of $90,000.00 of Kavanaugh’s debts mysteriously vanished in the months prior to his nomination, this should have been investigated, and it wasn’t.

In fact, as Whitehouse notes, the FBI refused to even call people back who contacted the agency with concerns regarding the now Supreme Court Justice:

The FBI is facing new scrutiny for its 2018 background check of Brett Kavanaugh, the supreme court justice, after a lawmaker suggested that the investigation may have been “fake”.

Sheldon Whitehouse, a Democratic senator and former prosecutor who serves on the judiciary committee, is calling on the newly-confirmed attorney general, Merrick Garland, to help facilitate “proper oversight” by the Senate into questions about how thoroughly the FBI investigated Kavanaugh during his confirmation hearing.

………

The FBI was called to investigate the allegations during the Senate confirmation process but was later accused by some Democratic senators of conducting an incomplete background check. For example, two key witnesses – Ford and Kavanaugh – were never interviewed as part of the inquiry.

Among the concerns listed in Whitehouse’s letter to Garland are allegations that some witnesses who wanted to share their accounts with the FBI could not find anyone at the bureau who would accept their testimony and that it had not assigned any individual to accept or gather evidence.

………

He added that, once the FBI decided to create a “tip line”, senators were not given any information on how or whether new allegations were processed and evaluated. While senators’ brief review of the allegations gathered by the tip line showed a “stack” of information had come in, there was no further explanation on the steps that had been taken to review the information, Whitehouse said.

“This ‘tip line’ appears to have operated more like a garbage chute, with everything that came down the chute consigned without review to the figurative dumpster,” he said.

………

Whitehouse said he is seeking answers about “how, why, and at whose behest” the FBI conducted a “fake” investigation if standard procedures were violated, including standards for following allegations gathered through FBI “tip lines”.

The allegations of sexual assault are concerning, but the financial irregularities, which are job one of any background investigation, and it appears that the FBI did not do this.

We already knew that Kavanaugh was the Federalist Society’s, “Made Man,” in a political sense, but it now appears that he was a, “Made Man,” in a way that is more akin to its original meaning of a fully initiated Mafiosi.

He’s in, and they pay his debts, bury his bodies, and make everything go away.

How Could We Tell?

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Mitch McConnell is threatening to be completely obstructionist if the Democrats make any change to the filibuster. 

We saw how he behaved 2009-2016, and how he has behaved this far this year, so I don’t think that he has a claim to have engaged in any good faith dealing during his entire career. 

Does the phrase, “The single most important thing we want to achieve is for President Obama to be a one-term president.,” ring a bell?

Mitch McConnell and good faith are as distantly related as Richard Feynman and a slime mold.*

As I am wont to say, F%$# him with Cheney’s dick:

The fight over the Senate filibuster escalated sharply on Tuesday, as President Biden for the first time threw his weight behind changing the rules even as Senator Mitch McConnell, the Republican leader, threatened harsh reprisals if Democrats moved to weaken the procedural tactic.

In an interview with ABC News, Mr. Biden gave his most direct endorsement yet of overhauling the filibuster, saying that he favored a return to what is called the talking filibuster: the requirement that opponents of legislation occupy the floor and make their case against it.

“I don’t think that you have to eliminate the filibuster; you have to do it, what it used to be when I first got to the Senate back in the old days,” the president said. “You had to stand up and command the floor, and you had to keep talking.” The comments were a significant departure for Mr. Biden, a 36-year veteran of the Senate who has been frequently described by aides as reluctant to alter Senate procedure.

………

Mr. Biden’s comments came as Mr. McConnell issued his stark warning and as the president’s allies on Capitol Hill began building a public case for the elimination of the tactic.

After Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, called for changes to reduce its power, Mr. McConnell, of Kentucky, bluntly promised a “scorched earth” response and pledged to grind the Senate to a standstill and derail Mr. Biden’s agenda if Democrats took that step.

“Everything that Democratic Senates did to Presidents Bush and Trump, everything the Republican Senate did to President Obama, would be child’s play compared to the disaster that Democrats would create for their own priorities if — if — they break the Senate,” Mr. McConnell said.

………

Seeking to slow Democrats and get the attention of the White House, Mr. McConnell was adamant that Republicans would tie the Senate into knots in retaliation if they took the step. He made his declaration after Mr. Durbin, a respected veteran of the institution, had said on Monday that it was time to stop allowing the minority party to routinely block legislation by requiring a three-fifths majority to advance most bills. It was the most explicit call yet by a Democrat leader to take action.

McConnell is already tying the institution in knots.  He cannot do any more evil than he is already doing now, and as such, he is at absolutely no risk of being gleeped by the Todal.†

Mr. Durbin noted that it was Mr. McConnell who institutionalized the use of the filibuster, which historically had been used rarely before the Kentuckian was in charge. Mr. Durbin said the procedural weapon was a particularly sore point for him, since it is has for two decades prevented Democrats from enacting the so-called Dream Act, a popular bipartisan bill that he wrote that would create a path to legal status for undocumented immigrants brought into the United States as children. Though it has majority support, it has never been able to clear the 60-vote threshold.

………

In his comments, Mr. McConnell threatened that Republicans would turn the rules against Democrats and try to make it virtually impossible to do anything in the Senate if they proceeded with the change. He referred to the fact that the chamber operates under arcane rules often bypassed through what is known as a unanimous consent agreement where no senator objects. If Democrats plunged ahead to gut the filibuster, he warned, Republicans would deny consent even on the most mundane of matters, effectively bogging down the Senate.

“Let me say this very clearly for all 99 of my colleagues,” Mr. McConnell said. “Nobody serving in this chamber can even begin — can even begin — to imagine what a completely scorched earth Senate would look like — none. None of us have served one minute in a Senate that was completely drained of comity, and this is an institution that requires unanimous consent to turn the lights on before noon.”

Yes we can, because you have been making it so for decades.

To the degree that Mitch McConnell sheds tears over any change to the filibuster, I will use them to salt my soup.

*Yes, I AM aware that I am probably insulting slime molds.
†The Todal is a punishment sent by the Devil to punish evildoers for not doing sufficient evil. Read James Thurber’s The 13 Clocks. It is a masterpiece.

Stating the Obvious

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Over at Foreign Policy, they make what should be a common sense observation, that the as a result of the hardball tactics of the US, including proving itself that it will not abide by international agreements that it joins has an obvious effect, that, “Iran Is Starting to Want the Bomb.”

That is what has happened with the DPRK, and now it appears to be happening with Iran:

On Feb. 8, Iranian Intelligence Minister Mahmoud Alavi, in an interview with Iranian state television, made a veiled threat about his country’s pursuit of a nuclear weapon. “The supreme leader [Ayatollah Ali Khamenei] has explicitly said in his fatwa that nuclear weapons are against sharia law and the Islamic Republic sees them as religiously forbidden and does not pursue them,” Alavi said. “But a cornered cat may behave differently from when the cat is free. And if they [Western powers] push Iran in that direction, then it’s no longer Iran’s fault.”

………

All these responses misunderstand the real significance of Alavi’s “cornered cat” threat. The whole debate over Khamenei’s fatwa banning nuclear weapons has always been much ado about nothing; it never really mattered in the first place for either side. (The very fact that world powers engaged in marathon talks with Tehran from 2013 to 2015 to verifiably curb its nuclear program in exchange for economic relief confirms as much.) Far more important is what the comment reflects about an ongoing shift in Iran’s thinking about the bomb. Wide swaths of Iranian society, among the public and policymakers alike, seem to increasingly see the weapon not just as an ultimate deterrent but as a panacea for Iran’s chronic security problems and challenges to its sovereignty by foreign powers.

“Foreign powers” means the United States, whose record on following diplomatic agreements with Islamic Republic of Iran is almost as bad as its record on following treaties with American Indian nations in the 1800s. (The US has been blithely ignoring treaty obligations for decades involving pretty much every other nation on earth as well)

If your goal is to keep nuclear weapons out of Iranian hands, then the US needs to re-enter the Joint Comprehensive Plan of Action (JCPOA).

First Court Ordered Antitrust Breakup in Decades

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And it was the result of private litigation, not any action of the agencies that are actually supposed to protect us from monopolists.

The case involved “Door Skins” which are the inside and outside surfaces of residential doors, which over the years, through buyouts and mergers, has become a completely uncompetitive market.

After buying its biggest competitor, Jeld Wen, which also makes complete doors, cut off door manufactures from its supplies of door skins, and court has ruled that it must sell off one of its factories:

Federal antitrust enforcers have long succeeded at unwinding consummated mergers. By contrast, private antitrust plaintiffs have not successfully forced companies to break up a completed acquisition. Until now.

On February 18, 2021, the U.S. Court of Appeals for the Fourth Circuit issued a historic decision in Steves and Sons, Inc. v. JELD-WEN, Inc., affirming a district court’s remedy of divestiture after a jury found a violation of Section 7 of the Clayton Act in the door manufacturing industry. To the Fourth Circuit’s knowledge (and the consensus of the antitrust bar), the Steves and Sons case is the first time a private plaintiff has secured a federal court order compelling a defendant to divest assets acquired through a past merger.

Absent further appellate relief, the Fourth Circuit’s opinion will require that the defendant unwind a 2012 acquisition of a doorskin manufacturing plant through an auction process supervised by a court-appointed special master. The decision has put parties to corporate merger and acquisition activity firmly on notice that private antitrust litigation may lead to unscrambling the eggs of a merger years after consummation, even when federal and state antitrust enforcers do not move to block the transaction as anticompetitive.

 This is likely going to end up at the Supreme Court, given the literally unprecedented nature of the ruling.

In 2012, JELD-WEN, Inc., one of the world’s largest door and window manufacturers, acquired Craftmaster International (CMI), a competing manufacturer. Before the combination, JELD-WEN and CMI each manufactured both interior molded doors and doorskins, which are veneers that are glued to the front and back of a frame to make a molded door. CMI produced doorskins at its plants in Towanda, Pennsylvania. Before the merger was consummated, it was investigated, but not challenged, by the Antitrust Division of the Department of Justice (DOJ). After the transaction closed, only two doorskin manufacturers remained in the U.S. market (JELD-WEN and Masonite). A JELD-WEN investor later noted that this duopoly “over time will improve our pricing power.”

Based on a long-term supply contract, JELD-WEN sold doorskins to Steves and Sons (Steves), an independent door manufacturer owned and operated by the same family for 150 years. In 2014, Masonite announced it would stop selling doorskins to independent door manufacturers like Steves. Shortly thereafter, JELD-WEN exercised its right to terminate the supply contract with Steves, effective in September 2021. As JELD-WEN’s prices increased and quality issues arose, Steves asked the DOJ to reexamine JELD-WEN’s merger with CMI. In 2016, the DOJ closed its investigation. Unable to secure any enforcement action, Steves filed a complaint in the U.S. District Court for the Eastern District of Virginia, alleging, among other things, that the JELD-WEN/CMI acquisition violated Section 7 of the Clayton Act. Steves asked for equitable relief to unravel the CMI acquisition and to divest JELD-WEN’s doorskin plant in Towanda.

………

On appeal, the Fourth Circuit vacated much of the antitrust damages award, but rejected JELD-WEN’s numerous arguments related to antitrust injury, “antitrust impact,” evidentiary rulings, and the propriety of divestiture as a remedy, and held that the district court did not abuse its discretion by ordering divestiture of the Towanda plant. The appeals court noted that private lawsuits under the Clayton Act “seeking divestiture are rare and, to our knowledge, no court had ever ordered divestiture in a private suit before this case,” but that divestitures in private Clayton Act actions are based on well-established U.S. Supreme Court precedent. Ultimately, the court concluded that the Steves case “is a poster child for divestiture” given that the 2012 CMI merger had created a duopoly and the remaining suppliers “used their market power to threaten [the] survival” of independent door manufacturers like Steves.

Lots of footnotes at the link, but the this is, to quote President Biden, “A big f%$#ing deal,” at least as long as the ruling stands.

It has the potential for tying up mergers and acquisitions for months through private litigation by competitors, particularly if some well heeled groups arrange for pro bono, or at least subsidized legal action.

This is why I expect the Supreme Court to rule on this, and I’m not optimistic about the outcome there.

H/t Matt Stoller’s Big.

Yeah, That’s Gonna Help

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In response to the brutal and negligent killing of Breonna Taylor by out of control police, the Kentucky State Senate has passed a bill making it illegal to insult police, because apparently police officers are beautiful cinnamon rolls too perfect for this world.

OK,the bit about cinnamon rolls came from The Onion, but God help us, the rest of this is true:

Kentucky’s Republican-majority Senate on Thursday moved forward a bill that would make it easier to arrest protesters for insulting a police officer, a measure that critics say would stifle free speech.

The bill, passed two days before the anniversary of the fatal police shooting of Breonna Taylor, would make it a misdemeanor to taunt or challenge an officer with words or gestures “that would have a direct tendency to provoke a violent response from the perspective of a reasonable and prudent person.” Conviction would be punishable by up to 90 days in jail and fines of up to $250.

State Sen. Danny Carroll (R), who sponsored the bill, said it would enable officers to arrest someone inflaming them before the encounter turns violent. The provision is meant to apply to comments that are “obviously designed to elicit a response from the officer — something to push them to making a mistake, pushing them to violence,” he said, although courts would have the final say in interpreting the rule.

“You don’t have a right to accost a police officer,” Carroll said.

In addition to criminalizing taunting police, the bill would expand the category of protest behavior considered illegal, heighten sentences for offenses related to “riots” and prevent early release for those violations. It comes as Louisville, Kentucky’s largest city, prepares for hundreds of people to gather downtown Saturday to recognize the first anniversary of Taylor being fatally shot during an early-morning raid.

………

The American Civil Liberties Union of Kentucky called the measure “an extreme bill to stifle dissent” with broad and ambiguous language.

“It’s criminalizing speech in a way that’s directed at protesters and people who are speaking out against police action,” said Corey Shapiro, ACLU of Kentucky’s legal director. “It is a bedrock principle of the First Amendment that people should be able to criticize police action, even if it’s using offensive speech.”

The provision of the bill that would ban insulting police was modeled on laws in other states prohibiting comments that could reasonably push a person to violence, said Carroll, himself a former police officer. Those statutes, which are not specific to anti-police comments, rely on an exception to the First Amendment known as the “fighting words doctrine,” which holds that words inciting immediate violence are not constitutionally protected.

I am going to go out on a limb here, but I think that dealing with violent and verbally abusive people is a central part of a police officer’s job.

Also, the, “Fighting Words Doctrine,” has largely been vitiated over the past 4 or 5 decades, and

If you cannot deal with someone calling you a pig-felching racist douche bag without resorting to violence, you probably are:

  • A pig felching racist douche bag.
  • Completely unsuited to the job of peace officer. 

As an aside, if you do not know the definition of the word, “Felch,” DON’T look it up.

Trust me on this one.

Linkage

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A follow-on to my earlier post regarding my dislike of Daylight Savings Time: